7th Pay Commission: Know when Government will hike Salaries of Employees by 17 Percent

As the government is keeping its mouth shut about the pay hike, a media report suggested that the much-awaited salary hike suggested by 7th pay commission may take place after the assembly elections declared by the Election Commission recently. According to the report, the government will execute the pay hike under 7th Pay Commission following the elections concludes in Himachal Pradesh and Gujarat in December. The government is planning to give salary hike to employees in January as the counting of both the polls will be held on December 18.

As per the report, the government will evaluate the economic slowdown due to GST and demonetization into attention before implementing the increase. It is still not clear that how much the government will hike as of now. The government wants to increase the minimum basic salary to Rs 18,000, whereas the government employees wanted minimum basic salary to be Rs 26,000. The government, on the other hand, offered a Fitment factor 2.57 times, but the employees demanded a Fitment factor 3.68 times.  The government is expected to find a middle way – it could make the Fitment factor 3 times and the minimum basic salary Rs 21,000, as per the reports.

On the other hand, the government is going through a tough time because of economic slowdown (GST and demonetization) and fulfilling the demand of employees may add extra pressure on the exchequer. At the same time, a report further added that the government may not pay the arrears and just hike the employees’ salary. A source told The Sen Times, “The financial advisers of the government believe it could be tough to give arrears of the hike in pay as the government has been worried after the April-June GDP growth slipped to a three-year low of 5.7 percent but the government believes it will bounce back in the second quarter. Among others, it observed that this year’s fiscal math is already stressed as public spending was front-loaded to offset slower private sector participation and cushion the impact of GST roll-out.”

Source: India.com

7th Pay Commission: Minimum pay to be Increased by Fitment Factor 3, without Arrears

The government is expected to increase the minimum pay afar the recommendation of the 7th Pay Commission for its employees next year. Hike in minimum pay to Rs 21,000 from Rs 18,000 recommended by the 7th Pay Commission and approved by the Cabinet, the government is studying to increase the minimum pay. Under the 7th Pay Commission, the government is expected to raise the Fitment factor from the ongoing 2.57 times to 3.00 times.

The Cabinet may take up the matter of hike in minimum pay in January 2018. The National Anomaly Committee (NAC), formed by Union Finance Minister Arun Jaitley to keep a vigil into the anomalies in the 7th Pay Commission recommendations’ implementation, probably endorse a first-time 17 percent rise over Rs 18,000 minimum pay approved under the 7th Pay Commission, as per the reports. According to the reports, the government has given a signal to proceed to the NAC for an increase in minimum pay with Fitment factor of 3.00 times. The government, on the other hand, is not expected to pay arrears on higher minimum pay because the government doesn’t want to put an extra burden on exchequer by releasing arrears.

Reportedly, the Finance Minister Arun Jaitley had promised representatives of the central government employees that minimum pay would be increased beyond the 7th Pay Commission. “Since the Finance minister Arun Jaitley had promised to hike minimum pay after discussions with all stakeholders, efforts would be made to fulfill the same,” a Finance Ministry official was quoted as saying. The NAC is expected to submit its report on minimum pay soon, which will be later examined by the Empowered Committee of Secretaries and the Department of Expenditure. The 7th Pay Commission, however, had recommended a 14.27 percent in basic pay, which was the lowest in last 70 years. After this, the central government employees started demanding the rise in minimum pay from Rs 18,000 to Rs 26,000 and fitment factor 3.68 times from 2.57 times.

Cabinet Approves Commission of Second Pay Commission 34 Changes for 48 Lakh Employees

On 28 June, The Union Cabinet approved the recommendation of 7th Pay Commission Allowances with 34 amendments that will impose an additional annual burden of Rs. 30,748  on exchequer. This move will impact  50 lakh government employees and will result in what the government calls a modest increase of Rs 1448.23 crore per annum over the projections made by the 7th Central Pay Commission.

The  projected financial implication on allowances  by the commission is at Rs Rs. 29,300 crore per annum. Hence, the combined additional financial implication is  estimated at Rs 30748.23 crore per annum.

The increased allowances will comes into effect from 1 July 2017 and is based on the recommendations of the Committee on Allowances.

In the Cabinet meeting, the Finance Minister Arun Jaitley brief the media and said, ” All the modifications are based on suggestions made by the Committee on Allowances (CoA). In its report submitted to the Finance Minister on April 27 the Empowered Committee of Secretaries set up to screen the recommendations of the 7th Pay Commission.”

The Highlights of approved recommendation on 7th Pay Commission Allowances by cabinet:

  1. Number of allowances recommended to be abolished:

He  added, the Commission suggested that out of the eradication of 53 allowances the government decided not to do away with the 12 allowance.

Before approving its recommendations the  7th pay commission had undertaken the its stakeholder consultations and interacted with Joint Consultative Machinery and representatives from various staff associations.

Most of the modifications are based on the continuing requirement of some of the existing administrative exigencies and arrangements  to further rationalisation of the allowances structure.

  1. House Rent Allowance

Currently, HRA is paid at 30 percent for X cities in which the population is 50 lakh and above,  20 percent for peoples living in Y cities with population of 5 to 50 lakh and 10 percent for those employees who live in  Z  category city in which the population is below 5 lakh. The panel recommended the reduction in the existing rates to 24 percent for X cities, 16 percent for Y cities and 8 percent for employees residing in Z category of cities. While the new reduced rates of HRA  may not be sufficient for employees who fall in lower pay bracket, so it has been decided that HRA shall not be less than Rs 5400 for X, Rs 3600 for Y and Rs 1800 for employees of Z category of cities. This base rate has been calculated at 30 %, 20% and 10 %  for the minimum pay of Rs 18000. This scheme  will benefit more than 7.5 lakh employees who belongs to  1 to 3 Level.

Further, HRA rates will be revised in two phases to 27 percent, 18 percent and 9 percent when DA crosses 50 per cent and to 30 per cent, 20 percent and 10 percent when DA crosses 100 percent, respectively. As per the current inflation trends these rates will be revised when DA crosses 25 percent and 50 per cent respectively.

  1. Siachen Allowance

The panel had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of Rs 21,000 and Rs 31,500. After recognizing the extreme risk and hardship faced by military who deployed in Siachen continuous basis, it was decided to enhance the rates of Siachen Allowance from the existing rate from Rs 14,000 to Rs 30,000 per month for Jawans and from Rs 21,000 to Rs 42,500 per month for Officer.

  1. Dress Allowance

The different types of allowances for maintenance of uniforms have been rationalized and now, annually it will be paid in four slabs of  Rs 5000, Rs 10,000, Rs 15,000 and Rs 20,000  for various category of employees. Nurses will continue to get this on a monthly basis in view of high maintenance and hygiene requirements.

  1. Some important allowances paid to all employees:
  • Rate of Children Education Allowance has been increased from Rs 1500 per month  to Rs 2250 per month for one child and maximum of two children. Hostel Subsidy will increases from Rs 4500 to Rs 6750 per month.
  • Special Allowance rates for Child Care for Women with Disabilities have been increased from Rs 1500 to Rs 3000 per month.
  • Incentive of Higher Education for Civilians has been increased from Rs 2000 – Rs 10000 to Rs 10000 – Rs 30000.
  1. Recommendations of some important allowances for Indian Railways employees:
  • Additional Allowance rates for Indian Railways employees have been increased from Rs 500-1000 per month to Rs 1125- 2250 per month.
  • New Allowance for Special Train Controller’s is Rs 5000 per month has been introduced.
  1. Recommendations for some important allowances paid to Nurses & Ministerial Staffs of Hospital
  • The rate of Nursing Allowance has been increased from Rs 4800 to Rs 7200 per month.
  • The Operation Theatre Allowance rates have been increased from Rs 360 to Rs 540 per month.
  • Hospital Patient Care Allowance rates have been increased from Rs 2070 – 2100 to Rs 4100 – 5300 per month.
  1. Recommendations of some important allowances paid to Pensioners:

Fixed Medical Allowance rates for Pensioners have been increased from Rs 500 to Rs 1000 per month. This will benefit more than five lakh central government pensioners who don’t get CGHS facilities. The rate of Constant Attendance Allowance been increased from Rs 4500 to Rs 6750 per month.

  1. Recommendations of some important allowances paid to Department of Posts

The 7th Central Pay Commission recommendations to abolish Cycle Allowance mainly to Postmen and trackmen in Railways have not been accepted. The allowance for postmen in Department of Posts and trackmen in Railways, the cycle allowance rates have been increased from Rs 90 per month to Rs 180 per month. Through this more than 22,200 employees will get benefit.

  1. Allowances to Services like Defense, Police, CAPFs, Indian Coast Guard and Security Agencies
  • Earlier, the commission recommended abolition of Ration Money Allowance and free ration to Defense officers but now it has been decided that Ration Money Allowance will continue to be paid to them directly into to their bank account.
  • The facility of an additional free railway warrant is now granted to staff of Defense Forces who are serving in high altitude, CI Ops shall be extended to all staff of Indian Coast Guard and CAPFs.
  • The rates of Counter Insurgency Ops Allowance to Defense and CAPFs deployed in counter   insurgency operations will be governed by the R&H Matrix and the rates increased  from Rs 3000 –11700 to Rs 6000–16900 per month.
  • Rates of MARCOS and Chariot Allowance granted to marine commandos of Indian Navy will go up from Rs 10500 – Rs 15750 to Rs 17300 – Rs 25000 per month.
  • Commando Battalion allowance rates for Resolute Action paid to CRPF personnel placed in Naxal hit areas will increases from Rs 8400 – Rs 16800 per month to Rs 17300 – Rs 25000 per month.
  • Flying Allowance paid to flying branch and technical officers of Defense Forces will go up from Rs 10500 – Rs 15750  to Rs 17300 – Rs 25000 per month.
  • Now, Aeronautical Allowance has been extended also to Indian Coast Guard which is paid only to the staff of Indian Navy and the rate of this allowance has been increased from Rs 300 to Rs 450 per month.

Cabinet Meeting on 7th Pay Commission Today, Likely to Discuss on Allowances

Today, around 5 pm, 50 lakh central employee will attend a cabinet meeting. It would be intresting to see if this cabinet meeting brings something good for the employees. In this meeting employees are expecting the decision on the issue of 7th pay Commission Allowances. Let us inform you that Narendra Modi has returned from foreign tour in the night and due to this,the meeting which was scheduled this morning will take place in the evening. According to NDTV, the agenda of this cabinet meeting is still not fixed but it is being speculated that in its last meeting of the month Narendra Modi’s cabinet will take decisions on revised allowances for Central government employees.

The issue of allowances for central government employees under the 7th Pay Commission has been reeling for over a year with reviews at different levels. However, a definite outcome has eluded adding to the frustration among the central government employees. The Union Cabinet was expected to approve the proposal on allowances last week but it got delayed as the Prime Minister Modi was visiting Washington.

It was reported that the House Rent Allowance or HRA could be approved at 27 per cent of the basic pay. The Pay Panel had brought down, in its recommendation, the HRA to 24 per cent, 16 per cent and 8 per cent of the basic pay, depending upon the city the employee is posted in.

The sixth pay commission had pegged the HRA at 30 per cent, 20 per cent and 10 per cent.

The Commission not only brought down the HRA but also done away with as many as 52 allowances. It recommended that out of a total 196 allowances, 52 be discontinued and 36 other allowances should be subsumed under other allowances.

Drastic change in HRA and other allowances did not go well with the central government employees who expressed their opposition and asked the government to take a re-look at the proposed recommendations.

Coming under pressure from nearly 47 lakh central government employees, the Cabinet formed a Committee on Allowances under Finance Secretary Ashok Lavasa last year in June. The Committee was tasked to look into the extensive changes suggested by the 7th Pay Commission.

The Lavasa Committee handed over its review report to the Finance Minister in April after consulting representations from various government departments. The report, post approval, was forwarded to E-CoS for their consideration and consolidation.

7th Pay Commission, Central Govt Employee Wait Till June 1st For Salary Hike

There’s good news coming for the central government employees as the cabinet secretary said on Thursday that the report on higher allowance under 7th Pay Commission regarding the hike in allowances as it’ll be will be reviewed on or before June 1, 2017. This announcement came as bliss for the central government employees who were annoyed over the, again and again, delay in considering the recommendations by the responsible empowered committee (E-cos). Over 50 lakh central government employees have been waiting for the amended salary under the 7th Pay Commission.

According to the reports by Oneindia.com, the National Council (Staff Side) Joint Consultative Machinery met Cabinet Secretary and presented the demands of the employees. The Cabinet Secretary has fixed the June 1, 2017, date to check the report of Allowance Committee by the Empowered Committee, as per the report. On the other hand, as the deadline of June 1 has been set for the consideration, the only remaining step for the implementation would remain an approval from the union cabinet.  The report said, quoting the letter presented by NJCA secretary Shiv Gopal Mishra to Cabinet, “Today I met the Cabinet Secretary (Government of India) and handed him over a copy of our letter regarding the inordinate delay in implementation of the report of the Ashok Lavasa Committee on Allowances. Also shown him our anguish regarding other demands, pending with different committees, such as Minimum Wage, Fitment Formula, and NPS, etc.”

The cabinet has already approved vital key modifications in the 7th Pay Commission, which will be applicable from January 1, 2016. Lavasa Committee has submitted its report on the various allowances paid to the government employees on April 28. On the other hand, it was commissioned in June 2016, the abolition of 53 allowances along with the possibility of 36 further allowances (out of 196 allowances under the 7th Pay Commission), the Ashok Lavasa Committee has looked into it. The committee has suggested a change in the present system of rates of existing allowances such as the House Rent Allowance.

It has recommended that House Rent Allowance (HRD) be paid at the rate of 24%, 16%, and 8%, depending on the city of residence. On the other hand, the employees union has demanded that House Rent Allowance (HRD) at 30%, 20% and 10% where the Dearness Allowance (DA) crosses 100 percent. If the Dearness Allowance (DA) crosses 50 percent, then the committee demanded the HRD be given at the rate of 27%, 18%, and 9%. In April, the Finance minister said while accepting the file that it will be examined in the Department of Expenditure and will be screened before the Empowered Committee of Secretaries (E-cos) to set-up under the 7th Pay Commission and to make the perfect proposal for approval of the cabinet.